One of the reasons people give for not addressing their tax problems is the feeling they cannot pay the penalties so there is no point in addressing the problem. This mistaken belief is a double tragedy: not only does it prolong the taxpayers’ suffering, but with appropriate expert help you can reduce or eliminate tax penalties. Some of these techniques may be used every few years so that the sooner the taxpayer seeks relief, the more relief they will be able to get.
Taxpayers can reduce or eliminate tax penalties for most tax issues including failure to file, late payment, inadequate payment, and many other infractions. If this is the first time you are asking for relief, and you meet certain other criteria you can reduce or eliminate tax penalties just by showing you qualify as a first-time requester. Make sure to discuss with your tax resolution professional how to qualify for this relief – it is widely available, but taxpayers must take specific steps to ensure they qualify.
Taxpayers can reduce or eliminate tax penalties if they can show a ‘reasonable cause’ as to why they did not file or pay their taxes correctly or on time. Any time an imprecise term such as ‘reasonable’ is used in a legal context, you need to consult an expert in what the term means in that specific context. What you, as a taxpayer may consider ‘reasonable’ is very likely not how the IRS uses the term. Presenting your cause as ‘reasonable’ correctly will likely determine if you can reduce or eliminate tax penalties.
Effectively presenting your cause as ‘reasonable’ and properly documenting that claim will help you to reduce or eliminate tax penalties and make you glad to have invested the time to speak with an expert. If you or someone you know has received an IRS collection letter and are unable or unsure how to proceed contact me at 812 271-4400, or David@RatowitzLawGroup.com.